Industry

Third Energy seeks geothermal heat from old Ryedale gas wells

Third Energy’s fracking site at Kirby Misperton, 18 January 2018. Photo: Eddie Thornton

A company that tried to frack in North Yorkshire three years ago says it wants to re-use old gas sites for renewable energy.

Third Energy has told local people it is looking to generate geothermal energy as a way to extend the life of its wells in Ryedale.

The scheme could see the end of gas production in the area.

“If successful, this could have a revolutionary impact on the UK onshore oil and gas sector”, the company said.

It is also updating its gas-fired power station and considering solar projects and battery storage.

The company’s change of direction has been cautiously welcomed locally.

“Prohibitive costs” of abandonment

Third Energy said geothermal projects could extend the value of its wells for up to 40 years. They were also part of a solution to what the company described as the “prohibitive” costs of decommissioning.

A legal challenge at the High Court argued this summer that Third Energy might not be able to afford to decommission its Ryedale gas wells.

In a public presentation this week, the company acknowledged the cost could reach £1.5m per onshore well.

The Third Energy website also said:

“the current P&A [plugging and abandonment] practices of the oil and gas industry are cost prohibitive, resulting in delays to abandonment (as companies attempt to avoid the high cost), and poor abandonment practices that may be harmful to the environment.”

But it said:

“Fortunately, there are solutions to this problem. Our ambition is to use new and innovative technologies to P&A the wells in a more effective and sustainable manner, and first to extend the period our wells may service the community by re-purposing them for geothermal energy.”

Third Energy’s Ryedale pipeline network. Map: Third Energy

For more than 25 years, the company piped gas from six well sites to an electricity generating station at Knapton.

In 2016, it received planning permission, despite much local opposition, to frack the existing KM8 well at Kirby Misperton. But despite preparing the site, the company did not get final hydraulic fracturing approval from the government. Last week, bags of fracking sand were finally removed from the site.

The company, formerly owned by Barclays, was sold in 2019 to the US firm, Alpha Energy, and the Ryedale wellsites have not produced gas for nearly a year (DrillOrDrop report).

Third Energy said the wells on its site at the Pickering Showground could be repurposed to produce geothermal energy to heat glasshouses, nearby homes or the Flamingoland theme park.

Other wellsites being considered for geothermal schemes included Malton and Kirby Misterton, the company said.

Third Energy said it was:

“working with several companies to assess the feasibility of using some of our wells for geothermal energy which could provide clean renewable energy for 30-40 years. An initial capacity study has already been undertaken and the next step is to get techno economic feasibility undertaken.”

The company said the cost of drilling was normally 40-60% of the capital expenditure of a geothermal project. Because no drilling would be needed, this would be a “significant saving” for projects using any of the company’s 12 former gas wells, it said. Third Energy’s geological knowledge and site infrastructure were also advantages, it said.

Third Energy is the second onshore oil and gas company to look at geothermal energy recently. Earlier this month, IGas announced it had acquired GT Energy UK Limited, which has geothermal plans in Stoke on Trent.

New plugging and abandonment techniques

Third Energy said it also wanted to test new abandonment techniques on its depleted gas wells. This would, it said, allow tools to be practiced onshore before applying them in the North Sea.

The company said the estimated cost of traditional decommissioning oil and gas wells in the UK continental shelf was £49bn:

“It is unlikely the private sector will be able to fund the full programme which risks the bill being left with the UK tax payer.”

Third Energy said alternative methods would be quicker, cheaper and more effective. They would also reduce the amount of cement used in plugging and abandonment, resulting in a lower carbon footprint.

The company said it was working with the Oil & Gas Technology Centre in Aberdeen to develop decommissioning techniques and a supply chain of companies.

New turbines

Knapton Generating Station. Photo: Third Energy

In another development, Third Energy said it was applying for planning permission for new 49.5MW capacity gas engines to generate electricity at Knapton for times of peak demand.

The aging generating turbines were ordered to close by 2021 and have now been decommissioned.

Gas for the new generating equipment would be supplied from the grid, not the Ryedale well sites, Third Energy said. Plant that processed the Ryedale gas before use in the power station was being decommissioned and removed.

Third Energy said:

“This is … the clearest near-term project from which TE [Third Energy] can become cash-flow positive and support its various other projects.”

The company said emissions from the new generators would be lower than the previous turbine. It had held talks with a research firm on testing carbon capture technology, it added.

The generator site, now called Knapton Energy Park, could also host battery storage, combined heat and power, hydrogen and solar energy schemes, the company said.

Third Energy has not published a timescale or budget for the projects. No one from the company was available to answer our questions today. But DrillOrDrop will be publishing an extended interview with the company early next week.

“Considerable change in direction”

Hazel Winter, a member of the Kirby Misperton community liaison group (clg), said today:

“Third Energy’s plans show a considerable change in direction towards greener energy solutions and I am particularly pleased the company accepts their responsibility to decommission wells which are no longer viable.

“They have acknowledged that the current practices of the oil and gas industry are inadequate as companies delay closing down wells in an attempt to avoid the high cost or resort to poor abandonment practices that may be harmful to the environment. 

“This week the Energy Minister Kwasi Kwarteng invited anti-fracking MPs Lee Rowley and Alexander Stafford to celebrate victory as he confirmed  fracking is no longer something the government envisages as part of its progress towards net zero.

“Despite our local MP Kevin Hollinrake not taking the same stance on behalf of his constituents, campaigners’ hard work means that Ryedale can also celebrate as Third Energy move ever further away from fracking. 

“I am hopeful the open discussions via the CLG will continue and that we are able to work together to bring benefits both in terms of sustainable energy and local jobs. After all the disruption and conflict of the past, I look forward to a much more positive and transparent relationship with Third Energy which will allow the community to continue its healing process.”

Local Lib Dem councillor, Steve Mason, said:

“Way back in January, as the local councillor for KM8, I challenged Third Energy to work closely with the community on greener plans for the future and, I have to say, I was pleasantly surprised by the response. Russell Hoare, Third Energy’s managing director, opened up conversations and the discussions have been ongoing since then.

“Rather than talking down to the community, the conversations have been open and honest, and a real welcome change from the division and mistrust from previous years. There was a lot of division within the community and there is still a lot of healing that needs to happen, That said, these open and frank discussions are a breath of fresh air but you can be certain that there will be a high level of scrutiny from us councillors, the [Kirby Misperton] Community Liaison Group, and residents as a whole.

“Third Energy presented to the Community Liaison Group on Monday proposals that are a big step away from fracking in this part of Ryedale. We watch this space with interest.”

23 replies »

  1. Can’t quite understand this from DoD.

    Did this company attempt to frack three years ago??? Why did the sale in 2019 which was reported as well, not mean this is a new company since 2019, so this company could NOT have attempted to frack three years ago.

    Mr. Mason seems to indicate a new approach, yet this article seems to want to muddy that water. Come on.

    • Hi Martin, sorry you found the article confusing.
      In 2016 Third Energy UK Gas Ltd applied for permission to hydraulically stimulate and test at Kirby Misperton. Eventually, the project was abandoned as the company didn’t get the go-ahead from the OGA.
      The company, together with its parent Third Energy Onshore Ltd, was then sold as you say. However, the company continues to exist as a private limited company with new owners. Selling a private company doesn’t mean that it ceases to exist or becomes a new entity.
      The Companies House page for Third Energy UK Gas Ltd (https://beta.companieshouse.gov.uk/company/01421481) shows that it continues as an active company.
      The DoD article makes clear that the new owners are seeking to take the company in a new direction.
      Look out for an interview with the company next week.

      • I think you will find it DOES become a new entity, Paul, even though it keeps the name. If it has been sold and is now owned and funded by a new entity, it is managed by “new entities”, (which you acknowledge) then it is a new entity!

        Have you not been down the Dog and Duck after take over? Think you will find it has become a new entity, and has no connection to the old Dog and Duck, apart from the premises-which have probably changed -as is the current undertaking at Third Energy.

        No, I did not find the article confusing. It is just incorrect. I have been within two companies that were taken over. One then had a change of name, the other did not. BUT they both became new entities-that was one of the key purposes of the takeovers! A quite straight forward and common occurrence, so I am still not confused but wonder why DoD would want to confuse. I did start off believing it was an error.

        • In terms of a legal entity if a company is sold complete ie not just the assets, then the company continues to exist, the new owners simply step into the previous owners shoes, so to speak. So legally it is correct to say the same company. This was why Third Energy could state they had been operating for thirty years, when they only acquired the company from Viking Gas in 2011.

          • Absolute nonsense, KatT.

            I have spent months talking with clients/suppliers after a takeover to explain to them how the company has not continued to exist but is a new company with new objectives. Like the Dog and Duck, many references to them ie. before, and us ie now and going forward. (You may find the Brown Horse still wants to refer to the Dog and Duck as it was because they have their own reasons for doing so! Welcome to that grouping. If you want to be in that place, it is your choice.)

            Of course, you may, occasionally, find a business that is bought and the new owner makes it very clear that nothing will change (although, it usually does) and then your argument may hold some water, but this is far from the case with Third Energy, (as reported previously) and would usually only apply to a business that is on a fast and successful growth curve.

            Looks increasingly that this is more about attempting to transfer a grievance against what happened in the past, although the future would appear to be quite different. Maybe too much effort to examine whether a new grievance is justified?

            Looking at the comments from Mr. Mason it would appear that some are more open minded.

            • Absolutely, legally correct Martin. You are mixing legal entity with a company’s potential operational changes. Not the same thing at all. You always like the last word but it doesn’t mean you are right.

          • Martin, I do not think Drill and Drop want to confuse. Third Energy presented the takeover in the press with the exact words Kat has used. When it first happened the CLG was told that it was exactly the same operation but with Alpha Energy now the parent company. Alan Linn remained as Director and all the planning applications were extended on the premise that there was still the opportunity for gas extraction from the wells with dewatering at Pickering in particular looking ‘promising’. Alpha Energy are an oil and gas firm who, according to their website, are interested in overlooked conventional resources. Alan Linn’s contract was terminated in December 2019 and it seems the conventional resources are not what was hoped for so the assets now have to be looked at in a different way. Any move towards sustainable energy is welcomed and so is a solution for the decommissioning of wells. We’re not talking enhanced geothermal, fracking and steam turbines for electricity but using heat from shallower formations via the watered out conventional wells for local projects.

            • Yes, Hazel, on the first days after a takeover very little changes! Shock/horror.

              But, that was a while ago, and it has been apparent for anyone without blinkers to see what has happened.

              Others may wish to follow a different path, but they may want to look at Deuteronomy 24:16. Not new and still not fitting to the moral high ground often claimed. Just a path I prefer to avoid, as it is usually designed to lead people in a particular direction.

              And, just as an aside, electricity generation from gas is still part of the mix under consideration. Via a “cleaner” generator, but that was always going to be the case. Not sure the gas will be “greener”-that depends upon where it comes from going forward.

              It really is not that surprising. There is a moratorium on fracking so obviously utilization of the acquired assets will take a different route. Indeed, the assets before takeover were known to be in need of new technology to utilize economically, hence the desire to test fracking.

              No, it should not be confusing.

              Geothermal does have it’s place. It has been operating in the middle of Southampton for many years. (Follow the signs to IKEA, and it sits next door.) Not a game changer, but a useful addition-where it can be done. (You can then look across to the oil refinery at Fawley, to place in context.)
              There are instances of where it has been done, and shouldn’t have been done-I recall one situation in Germany, but making use of existing wells sounds quite promising. Much better than the antis “alternative” of filling them with radio active waste!

    • Please enlighten us on the radioactive equipment WD? Which equipment. What type of radioactivity. Levels of radioactivity. Source of radioactivity. We can then let you know where it will “end up”.

    • Except it seems to be desirable by some of the same individuals who are against fracking for gas. Funny old world really.

      That Naomi had a useful message:

      “I don’t want you to panic. I want you to think.”

    • Fracking without most of the chemicals? Please explain Mrs. Stacklady. Are you aware of what chemicals Cuadrilla used in the Fylde? Please advise the formulation to frack granite – it will be interesting to see what the difference is.

      From the Environment Agency – Which chemicals were used by Cuadrilla in Preese Hall?
      Details of the chemicals which we assessed as non hazardous and permitted for use are listed on Cuadrilla’s website. They are:
      • 99.75% of the shale gas fracking fluid is made up of water and sand, beyond that a very limited number of chemicals are used:
      • Polyacrylamide friction reducers (0.075%), commonly used in cosmetics and facial creams, suspended in a hydrocarbon carrier;
      • Hydrochloric acid (0.125%), frequently found in swimming pools and used in developing drinking water wells,
      • Biocide (0.005%), used on rare occasions when the water provided from the local supplier needs to be further purified.

      Cuadrilla only utilised the polyacrylamide friction reducer in their operations at Preese Hall.

      There are more chemicals used completing a water well.

      If you can fracture granite and keep it open with less than the above you are onto a winner and should patent it.

  2. “It is unlikely the private sector will be able to fund the full programme which risks the bill being left with the UK tax payer.”

    Thanks for confirming what the public have warned local authorities about for years in planning objections, unheeded. A planning condition for a bond could have covered any shortfall- the wells will always require decommissioning, which is likely to come at a time when smaller companies have low income.

    This is another example of regulatory failure, see this new peer reviewed academic paper to learn about our inadequate regulation; https://www.mdpi.com/1660-4601/17/19/6946/pdf

    • Perhaps Peter K Roberts can answer that KatT? Unregulated, no traffic light system hydrofrack earthquake (as he calls it) damages his holiday home in Cornwall or Ryedale (do people go to Ryedale on holiday?) – but it is okay as it is perceived to be greener form of energy? Over to you Peter……

  3. Or, maybe in Cornwall they have a history of a bit of rumbling under their feet, and an acceptance of that is how they have made a living?

  4. Rather than the old (aspirational) fracking company, looking to establish a new source of gas, contrary to recommendations from the IPCC and CCC, it is very welcome and heartening to see Third Energy trying to move in a new direction that is compatible with the urgent need for carbon neutrality. While some of their plans are clearly ambitious and quite radical, it must be hoped that they will continue in a new vein of openness and honesty to gain the ‘social license’ and support of the local community, while successfully moving forward with the provision of sustainable energy. I wonder if any similar companies will wake up and smell the same coffee?

  5. If you did a bit of research Mike, you would find they already have!

    However, to place in context, my local Emergency Plan was received today, listing resources available for an emergency:

    Portable generators
    Water pumps
    Sandbags and sand
    Lighting
    Heating/fuel
    Chainsaws
    Tractors and other 4X4 vehicles
    People

    So, it seems sustainable energy has a nasty habit of being trashed by natural events and good old fossil fuel has to come to the rescue. Seems that since it has, the mortality from natural disasters has dropped by about 90%. Social licenses are reserved when no need experienced, but very different when a need is experienced.

  6. Still very keen on fossil fuel Martin – and maintaining the status quo of carbon and methane emissions? Have you had Covid and lost your sense of smell for the coffee. The brand you favour appears to be extremely bitter.

  7. Storm Alex arriving in UK today, Mike. Fossil fuel may be the answer to a few problems for quite a few today Mike. (Storms with leaves still upon the trees produce the usual pattern.) They might not be keen about it, but they will appreciate it if they think about it. There will be some who just panic and don’t think. Locally, we might even have to introduce part of our Emergency Plan.

    You mistake bitterness for reality, Mike. But then, your 12.47pm post (last sentence) did indicate you have a problem with the reality, so not too surprising. Or maybe, you know the reality but wish to suggest something alternative?

    Actually, my status quo is quite modest Mike. I have looked at the Scheme introduced yesterday-(UK doing nothing??) and find there is nothing there for me to get the tax payer to fund as I have already funded myself. Not because of dogma, just because it made sense economically. But, there will be some antis looking forward to a similar scheme for cars so they can have the tax payer scrap their diesels. Perhaps they could have already done the same themselves? Or, maybe they wasted too much money upon expensive coffee?

Add a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.